The government of Cambodia is engaging in a diplomatic campaign to win back the favor of Western countries and investors who were pushed out due to a surge in Chinese investment and a crackdown on political opposition and independent media beginning in 2016.
The United States, Australia, Japan, France, and Germany are among those targeted with a continuous flow of press releases and positive news stories in the local media, emphasizing strategic partnerships and requesting aid packages, investors, and tourists.
Other targets include Thailand, Vietnam, and Georgia.
Despite official growth numbers of over five percent a year, Cambodia’s economy is struggling, with eighty percent of the economy tied to the informal sector. The International Monetary Fund (IMF) report highlights significant downside risks, such as economic slowdown in China, high private debt, climate change, and geopolitical tensions. The IMF stressed the importance of governance and anti-corruption reforms to attract new foreign investment.
The IMF also mentioned that the compositional shift in tourist arrivals is resulting in less income per tourist compared to the pre-pandemic era, and warned about significant downside risks.
Transparency International reported a decline in Cambodia’s ranking on the 2023 Corruption Perceptions Index and highlighted persistent grand and political corruption.
The U.S., United Kingdom, and Canada have imposed targeted sanctions on criminal elements in Cambodia, and French President Emmanuel Macron’s aid agreement with Cambodia has come under criticism.
Hun Manet’s government has attempted to reboot the construction sector by offering investors tax breaks and visa extensions, but the country still requires substantial investment.
However, the government continues to blame others for Cambodia’s misfortunes and has shown few signs of political policy shift.
Government officials have also been blaming an Al Jazeera report for Cambodia’s poor image, despite the fact that other sources have raised concerns about human trafficking and scam compounds.
Cambodia is in need of Western investment and officials are eager to welcome it, but meaningful change is necessary to end the blame games, address corruption, and promote Western interests.